Accounting ripe for outsourcing

[OhioChick]

Published: Saturday, April 26, 2008

In April, accountants scramble to prepare client tax returns for the end-of-the-month deadline. It means long hours and searching for extra bodies to cope with the crunch. Horwath Orenstein, a 100-person chartered accounting firm in Toronto, has found a better way --outsourcing the work to India.

"We discovered it seven to eight years ago from networking in the United States," says partner Gary Marcus. "We found the U.S. was getting into it very deep, primarily from the processing of U.S. tax returns."

Horwath Orenstein partners visited India and were introduced to Datamatics Technologies Ltd., a 16-year-old, publicly traded outsourcer, which employs 700 in its accounting business, including 140 certified public accounts (CPAs) and certified accountants (CAs).

Datamatics was "interested in getting into the Canadian market, so we said, 'OK, let's try it out,' " Mr. Marcus says. "They had no idea what Canadian taxes were, so we sent them a dozen tax returns from the previous year for them to do from scratch." A few weeks later, the returns were sent back with only a few errors.

http://www.financialpost.com/story.html?id=472662

[Skittles]

1. fuck 'em all

ECONOMIC TREASON

[lapfog_1]

2. Surprisingly... almost every aspect of US corporate life

is ripe for outsourcing.

Why have a US based HR department when most of your staff is in China or India?

And if the vast majority of your company is over there, why not all of management too.

Indian CEOs living in India are a *lot* cheaper than US CEOs... and they don't need those millions of share of stock options either.

[drmeow]

4. You're not thinking like a corporation

the whole point of outsourcing is to be able to give CEOs MORE money and stock options since, of course, they are all part of the new American aristocracy and take care of their own.

[lapfog_1]

8. Oh, but I AM... because while CEOs THINK they are doing

all of this for them, they really do it for the Board of Directors and the Shareholders.

And those folks are already starting to ask questions about CEO compensation.

Not to mention, someone will ask why, if the staff is in India, aren't the VPs with the staff... and then it's just a hop-skip-jump for the Presidents and CEOs to follow.

It will happen. No one is immune with the possible exception of delivery, installation and sales (the folks that must interface with the customer). Of course, eventually, the customers will all be in Asia as well, and that leaves us... as just another has been third world country.

[drmeow]

10. But CEOs are on boards of directors

of other companies and people on the board of directors are CEOs of other companies. If they start doing it to their CEO, it could happen to them. They are all a tight knit family.

[lapfog_1]

11. True dat... but they aren't the majority share holders of any of them

they are simply the hired hands of the oligarchy that owns things here.

Bush's base... the "have mores" not just the "haves".

The ownership society.

Along with organizations that pool the money of the little people (CALPERS for example).

And THOSE owners want more money for themselves and less for the CEOs.

Won't happen overnight, but the handwriting is on the wall.

[drmeow]

12. Quite frankly

I've been amazed that more mutual fund/401K fund managers haven't been screaming bloody murder about CEO salaries sooner. Maybe the returns have been good enough that they've been willing to turn a blind eye. Alternatively, I wonder if the failure of many shareholders to return their proxy ballots have hamstrung them when it comes to voting. However, a threat to divest of that company's stock should be a pretty powerful threat. I certainly know that when I owned individual stocks (rather than mutual funds) there were frequently investor CEO salary issues to vote on and every single time the board of directors recommended a vote AGAINST any sort of transparency or reining in of salaries ... and, of course, none of them ever passed.

I hope that you are right that the handwriting is on the wall and I also hope that any changes are relatively permanent but I fear that we may have slipped fully into 3rd world country status before it happens.

[lapfog_1]

13. 3rd world status... That would be Mission: Accomplished! - n/t

[Double T]

3. We need to keep REPLACING our leaders UNTIL they STOP subscribing to this outrageous SHIT!!

[OhioChick]

5. We Sure as Hell Do. n/t

[boomboom]

6. i'm a senior tax manager in a public accounting firm

Been in the profession for 23 years, been at my current firm almost 2 years (i changed cities). this is the first firm i've worked for that outsources to India. You have to. there's too much work. you only outsource individuals, and you have the new staff review the India work first. It's messed up, I agree. India's work was really good 2 years ago, really spotty this year. I fought against it for a long time. I've resigned myself now. Obviously I have mixed emotions about this....if 25 year olds wanted to work the hours we 50 year olds did while we were "growing up", we probably wouldn't have to outsource.

[OhioChick]

7. ....

Quote: "if 25 year olds wanted to work the hours we 50 year olds did while we were "growing up", we probably wouldn't have to outsource."

The big question is: How much are companies willing to pay those 25-year-olds?
Bottom line....India is cheaper.

[Alcibiades]

9. Will economists be next?

I hope so. Those are the kooks behind all of this.